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Surprise drop in UK retail sales in December

High street and online spending in the UK fell from November to December, with both the quantity bought and the amount spent decreasing by 0.1%, official figures showed today.

The decline, which took some analysts by surprise, shows that consumers remained cautious throughout the key Christmas trading season.

Quarterly figures reveal that the amount spent by shoppers in the last three months of the year dropped by 0.6% compared with the previous three-month period, intensifying speculation that the UK economy contracted in the fourth quarter of 2012.

Meanwhile, a year-on-year comparison for December shows that retail sales increased by 0.3% compared with December 2011. This was worse than expected and indicates that the year-on-year growth seen since August has run out of steam.

There was even a slowdown in food purchases, which is unusual at this time of the year.

Helen Dickinson, director general of the British Retail Consortium, said the figures suggest that many households traded down to cheaper and own-label food items, but also that some people economised so that they had more money to spend on Christmas presents.

The Office for National Statistics pointed out that, with the exception of December 2010, when retail sales were hit by severe winter weather, the 0.3% increase in the quantity bought was the lowest recorded for the month of December since 1998.

More shopping was done online last month compared with a year ago. Internet sales accounted for 10.6% of all retail sales in December 2012, against 9.4% in December 2011. Over the same period, the average weekly spend online grew by around 15.5% to an estimated at GBP830.3m.


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